30/05/2013

30/05/2013

Examinership helps insolvent companies to stay afloat

Examinership legislation was introduced to enable insolvent companies explore all opportunities for their survival and it involves the appointment of an Examiner. The Examiner has between 70-100 days to seek investors and organise a creditors’ scheme of arrangement. The Examinership process involves the company being granted protection of the Court from its creditors to allow the Examiner explore a survival plan for the company. Before an Examiner will be appointed by the Court, it must be shown that the company is insolvent and that it can trade during the Examinership period without worsening the position of the creditors and most importantly that there is a viable trading business that can survive. The Court will also consider issues such as protection of jobs and the effect of a liquidation on the company’s creditors and other parties. An Independent Accountant is required to prepare a report (an IAR) to demonstrate to the Court the financial position of the company and compare how much creditors would get paid on a going concern basis versus on a liquidation basis, where assets are likely to be seriously impaired. The IAR must also demonstrate that the business is capable of survival and that it can trade on at least a cash neutral position during the Examinership process. Do you have any questions about examinership?  Feel free to contact Paul on +353 (0) 1 677 9000 or by email for a complimentary confidential consultation. Cooney Carey have been involved in a successful Examinership where our IAR was central to the appointment of the Examiner. We have the necessary experience to advise Directors whether the process is appropriate for their business and we have the track-record and team to improve the Company’s chance for survival. We will be happy to help. We think you might also like this article: How to Avoid Business Failure Part 1 Paul Leonard is a Partner at Cooney Carey. Paul has 20+ years of experience working as a business adviser and his areas of expertise are: audit, forensic accountant in investigations and a range of legal cases including family law matters, bank negotiations, business re-structuring, company valuations and dispute resolution. His qualifications include being a Fellow of the Institute of Chartered Accountants in Ireland, a Chartered Management Consultant, a qualified Forensic Accountant and an Accredited Mediator.